Wednesday, April 14, 2010

Ask Not For Whom The Whistle Blows . . .

That whistle you hear may not mean the end of the work day has arrived.

In the past two decades numerous states and the federal government have passed laws prohibiting employers from discharging employees for “blowing the whistle” on certain matters at work. Although these laws have been on the books for several years, it can still be difficult to differentiate between simple employee complaints and true “whistleblowing” that can land an employer in hot water. A recent $1 million dollar judgment issued against a Tennessee employer by the Occupational Health and Safety Administration (“OSHA”) re-emphasizes the importance of understanding this difference and the numerous state and federal whistleblower laws in general.

Last month, OSHA ordered Tennessee Commerce Bank in Nashville to reinstate a former corporate officer and pay more than $1 million in back pay, compensatory damages, interest, attorney fees, and other relief. The employee filed a complaint with OSHA after he was placed on administrative leave and then fired. The employee’s complaint alleged that the Bank placed him on leave and then fired him because he raised concerns about internal controls, employee accounts, insider trading, and other issues at the Bank. The employee first raised these issues to the Bank’s audit committee and later to the FDIC and the Tennessee Department of Financial institutions. OSHA investigated the employee’s complaint and found that the Bank had discharged the employee in violation of the whistleblower provisions of the Sarbanes-Oxley Act of 2002 (“SOX”). The Bank indicated that it would appeal OSHA’s decision.

Despite the outcome of the appeal, this case serves as an important reminder that retaliating against a “whistle blower” can expose an employer to as much liability as discharging an employee based on his or her race, gender, or age. And often times, this liability is much more difficult to identify than determining whether an employee is covered by other non-discrimination statutes.

Given the scope and ambiguity still present in the whistleblower laws, it is vitally important for employers to be aware of the parameters of state and federal laws prohibiting retaliation against whistleblowers. If you have any questions about a particular situation, feel free to contact us.

No comments: